A $29-billion deficit budget seems a bit more than Canadians bargained for.
The Liberal government announced its 2016 budget last week, and the deficit came in at approximately three times what was promised in the election campaign. The feds also broke the news that they would run deficits for their entire term. It raises questions of whether Canadians are getting quite what we were promised. The Liberals were given a mandate to keep their election promises, with perhaps some leeway to decide which ones to prioritize and determine dollar figures and timelines.
The budget is noteworthy for its social program spending, with restructured child and family benefits, billions for indigenous people and expanded Employment Insurance access. Ideally, it means that Canadians are lifted up and over a number of years, there are net savings in social costs because fewer people need help. These are long-term outcomes, though, that can’t be measured within the confines of a fiscal year. In the meantime, financing ongoing programs with deficit dollars could start to become troublesome.
In the bigger picture, the deficit is burdensome if it makes a dent in our country’s debt-to-GDP ratio and we can’t know those numbers today. It’s hard to predict, for example, how many jobs will be created by infrastructure spending schemes and harder still to calculate economic impacts of those projects.
A $29-billion deficit is too much, but the problem in saying that is that it begs the question: what’s the right number? The $10 billion the Liberals promised? The $10 billion, plus the billions that are considered contingencies, plus allowances for downgraded economic forecasts since the campaign? Some of the outcomes of the 2016 budget will be up to Canadians’ successes and failures within this framework. Maybe that’s how it should be.